State Bank of Pakistan designates Domestic
Systemically Important Banks
The State Bank of Pakistan has designated
Domestic Systemically Important Banks (D-SIBs) for the year 2023, following the
framework for D-SIBs introduced in April 2018. The framework aligns with
international standards and best practices while considering local dynamics. It
outlines the methodology for identifying and designating D-SIBs, along with
enhanced regulatory and supervisory requirements for them.
The purpose of these enhanced requirements is to
bolster the resilience of systemically important banks against shocks and
enhance their risk management capabilities. The identification process involves
two steps: first, a sample of D-SIBs is identified based on quantitative and
qualitative criteria, and then D-SIBs are designated from among the sample
banks, considering their size, interconnectedness, substitutability, and
complexity.
The State Bank of Pakistan has recently assessed
the banks' financials as of December 31, 2022, and as per this assessment,
three banks, namely National Bank of Pakistan, Habib Bank Limited, and United
Bank Limited, have been designated as D-SIBs for the year 2023.
These designated banks will be required to
maintain additional Common Equity Tier-1 (CET-1) capital, along with
implementing the enhanced supervisory requirements.